University of California, San Diego, Did Not Always Claim Nonpayroll Administrative and Clerical Costs Charged Directly to HHS Awards in Accordance with Federal Regulations

For the period October 1, 2008, through September 30, 2010, the University of California, San Diego, did not always claim reimbursement for nonpayroll administrative and clerical costs charged directly to HHS awards in accordance with Federal regulations. Of the 142 sample transactions, 17 transactions were not allowable. Specifically, the University claimed (1) costs for temporary employees that were not adequately supported, (2) costs for goods and services that were not allocable to the HHS awards, (3) office supply costs that were improperly charged as direct costs, and (4) excess facilities and administrative (F&A) costs for a capital expenditure misclassified as maintenance and repairs.

On the basis of our sample results, we estimated that the University claimed at least $202,000 in unallowable costs, consisting of $149,000 in unallowable nonpayroll costs and $54,000 in unallowable F&A costs related to the unallowable direct costs and the misclassification of a capital expenditure as maintenance and repairs. The University claimed unallowable costs because it did not always provide adequate oversight of nonpayroll administrative and clerical costs charged directly by departments to HHS awards to ensure compliance with Federal regulations.